A large timber farm supplies large building contractors with plywood and stick lumber. The managers of the timber farm have noticed that the demand for their timber tends to fluctuate with long- term business cycles and short- term changes in their timber production lead to sharp increases in their marginal cost. With this information, it is likely that _______- term forecasts are more valuable to the managers of the timber farm and the cost of _______- term forecasts are likely to exceed their benefit.

Question

Quizplus · Accepted Answer

Given the fluctuations in demand align with long-term business cycles and short-term production changes result in significant cost increases, long-term forecasts would be more valuable for planning and managing resources efficiently. Short-term forecasts, due to the sharp increases in marginal cost associated with production adjustments, are likely to be less beneficial, making their cost potentially outweigh their benefits.

A Large Timber Farm Supplies Large Building Contractors with Plywood